Sensex, Nifty climb nearly 1%; metal, banking and capital goods stocks rise

Equity benchmark Sensex rallied nearly 1 per cent to revisit the 59,000-mark on Monday, propelled by sharp gains in metal, banking, and capital goods stocks amid weak trend in global equities.

In a largely range-bound trade, the BSE benchmark rose 442.65 points, or 0.75 per cent, to settle at 59,245.98. During the day, it jumped 504.92 points, or 0.85 per cent, to 59,308.25. The NSE Nifty advanced 126.35 points, or 0.72 per cent, to 17,665.8.

Intense buying in index majors Reliance Industries (RIL), Sun Pharmaceutical Industries (Sun Pharma), and ITC, and an appreciating rupee also bolstered sentiment, said traders.

Sun Pharma was the biggest gainer in the Sensex pack, rising 1.81 per cent, followed by ITC, NTPC, RIL, Larsen & Toubro, Tata Steel, HCL Technologies, and ICICI Bank.

In contrast, Hindustan Unilever, Asian Paints, PowerGrid, Wipro, UltraTech Cement, and Nestlé were the laggards, slipping up to 1.51 per cent. In the broader market, the BSE SmallCap gauge climbed 0.89 per cent and the MidCap Index gained 0.46 per cent.

Among the BSE sectoral indices, metal jumped 2.04 per cent, capital goods (1.07 per cent), telecommunications (0.93 per cent), basic materials (0.91 per cent), banking (0.89 per cent), realty (0.73 per cent), and finance (0.71 per cent).

“It was a surprising bullish start for the week for the benchmark Nifty as bulls remained in total control shrugging off weak global cues, oil rising ahead of Organization of the Petroleum Exporting Countries (Opec) meet and, most importantly, the US Dollar Index scaling a fresh multi-decade high near 110.

“The Street is probably hoping for only a modest 0.5 per interest rate hike from the US Federal Reserve (Fed) this September. For Tuesday’s session, the Nifty’s major hurdle is seen at 17,757,” said Prashanth Tapse, research analyst, senior vice-president (research), Mehta Equities.

Meanwhile, the rupee appreciated 8 paise to close at 79.79 (provisional) against the US dollar on Monday.

Elsewhere in Asia, bourses in Seoul, Tokyo, and Hong Kong ended lower, while Shanghai settled in the green. Equities in Europe were trading lower during the mid-session deals. The US markets had ended lower on Friday.

“Benchmark indices outperformed their Asian peers and also shrugged off the weak European market sentiment as investors bet on metal, banking, and capital goods stocks. Cautious optimism prevailed as there are enough indications that markets may remain volatile in the coming sessions on global slowdown fears," said Shrikant Chouhan, head of equity research (retail), Kotak Securities.

The international oil benchmark Brent crude jumped 2.81 per cent to $95.63 per barrel.

“Concerns about the global economy, which is struggling with high inflation and recession, were stoked by mixed job data from the US and a worsening energy situation in Europe. Strong employment in the US will give the Fed the confidence to raise interest rates by another 50–75 basis points in the forthcoming policy meetings.

“In anticipation of a decrease in output, oil prices increased prior to the Opec+ summit. Meanwhile, none of these has impacted the domestic market, which continues to hold an upbeat outlook, bolstered by strengthening local economic statistics and rising corporate demand,” said Vinod Nair, head of research at Geojit Financial Services.

Foreign institutional investors offloaded shares worth a net ~8.79 crore on Friday, according to exchange data.

“Nifty broke out nicely of the two-day range move. Given the subdued sentiments abroad, it may find it difficult to rise sharply from hereon. Since US markets are shut on Monday, no cues will be available for Indian markets from there. Nifty could stay in the 17,778-17,476 band for the near term,” said Deepak Jasani, head of retail research, HDFC Securities.